Mega firms have played an increasingly important role in creating new technology over the past two decades. An antitrust paradigm that ignores this would have the perverse effect of exporting American innovation to other countries with less regulatory interference.

Mega Firms Are More Crucial Than Ever for Innovation

A start-up’s patent receives on average 20 percent more citations in the five years following its grant year than a comparable patent by an incumbent firm. This increases to 50 percent more citations in the six to ten years after the patent’s grant year and twice as many in the 11-15 years after its grant year.

Fact of the Week: Start-up Patents Are More Influential Than Patents Filed by Large Incumbent Firms

A recently released National Bureau of Economic Research working paper finds that larger firms’ greater returns on R&D activities is derived from their ability to capture a greater proportion of the value created by their inventions. 

Fact of the Week: Large Firms’ Innovation Advantage Stems From Greater Commercialization Capabilities

Fact of the Week: Large Firms' Innovation Advantage Stems From Greater Commercialization Capabilities

Patents are a key measure of innovation, but there is wide variation in the market value of a given innovation. A new study identifies one source of that variation by examining the relationship between whether a patent cited scientific articles in its application and the patent’s subsequent value.

Fact of the Week: Patents That Cite Scientific Articles are Worth 50 Percent More, on Average, Than Those That Don’t

Fact of the Week: Patents That Cite Scientific Articles are Worth 50 Percent More, on Average, Than Those That Don't

When a startup receives a patent, it hires an average of 16 more workers and generates $10.6 million more sales over the next five years, writes John Wu in Innovation Files.

Fact of the Week: Startups That are Successful in Their First Patent Applications go on to Develop 42 Percent More Subsequent Patents Than Startups That are Rejected

A recent paper found that the average innovative target firm received a takeover premium and cumulative abnormal stock returns that were 4.2 and 5.6 percentage points, respectively, higher than their non-innovative counterparts. 

Fact of the Week: Technology Sector Firms Pay a Higher Premium to Acquire Innovative Target Firms

It is widely presumed that agglomeration effects cause large cities to have large advantages in the innovative process. A new study tests this presumption by examining the proportion of patents filed in large metropolitan areas from 2000 to 2014 across 14 OECD countries.

Fact of the Week: The Ratio of Patent Filings to Population Living in Large Cities has Been Rising in the United States, but Falling in 13 out of 14 Other OECD Countries

A substantial portion of patents (28.2 percent in 2017) rely on government-funded research.

Fact of the Week: Twenty-Eight Percent of Patents by U.S. Inventors in 2017 Relied on Federal Research

This reversed the trend observed between 1995 and 2012, where the number of such patents granted increased at a rate of 10.3 percent per year.

Fact of the Week: The Number of High-Value Patents Granted for Climate Change Mitigation Technologies Decreased by 5.5 Percent Per Year from 2013 to 2017

Fact of the Week: Megafirms’ Share of Novel Patent Applications Had Risen to 32–33 Percent by 2016

Related

Mega Firms Are More Crucial Than Ever for Innovation

Fact of the Week: Start-up Patents Are More Influential Than Patents Filed by Large Incumbent Firms

Fact of the Week: Large Firms’ Innovation Advantage Stems From Greater Commercialization Capabilities